Why Buy Now?
Bottoms of real estate markets never annouce themselves with fanfare. Economists generally only determine the exact bottom long after the market has sharply rebounded. My prediction is that when the dust finally settles, the experts will look back on the time period between now and the presidential electionas the best time to have purchased a home.
Why is this the case? There are several interrelated reasons. The first is that the housing market in the metropolitan Atlanta area is far healthier than most housing markets in the United States. We’ve seen some price reductions in housing but nothing comparable to other parts of the country. With our region’s population increasing by 150,000 people per year, prices can only go so low because demand is constant. It is a nice cusion to have.
Second, for the moment, the Federal Reserve (FED) is more concerned about encouraing growth than controlling inflation. Don’t expect this to last. If inflation remains high, look for the FED to start raising rates right after the election. This, along with the turmoil in the secondary mortgate market, is likely to drive up mortgate interest rates. This will make the effective cost of housing much higher than it is now even if prices continue to fall somewhat or remain flat.
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Source: Atlanta Life Magazine, Seth Weissman / September 2008
